Why Some People Oppose Expanding Government Aid To The Poor

With food stamp eligibility standards tightening and extended unemployment payments ending, many on the left are harshly criticizing those on the right for seeking to roll back some of the social safety spending that has exploded recently (and over the longer term of the past half century). This column will not seek to define the correct level of safety net spending, but rather focus on a more accurate characterization of why many of those who oppose some of this spending do so. It is not because of any bad feelings toward the poor.

Most opponents of the current level of safety net spending believe that the vast majority of those receiving benefits are hardworking people who would rather be earning enough money not to need the benefits. Believing that does not mean that people must support safety net spending at the level we are handing it out today. The opposition to this spending, for most of the opponents, actually has nothing to do with those receiving the aid and is based on three totally different factors: libertarian-style beliefs in property rights, the difficulty of keeping their own fiscal houses in order, and a belief in the inefficiency of government.

To pay out these safety net benefits means the government must first get the money from somewhere. That means either taxes or borrowing. Since borrowing must be eventually paid for with taxes, government spending means taking somebody’s income in the form of taxes. While everyone, even the strictest libertarian believes in the need to pay some taxes in order to fund public goods like national defense, many people do not like having to pay taxes in order for the government to give their money to somebody else.

An unbridgeable distance exists between private charity and public welfare programs. Private charities are funded through voluntary donations. Public welfare programs are funded by mandatory tax collections. If a charity forced people to donate to it, that would be called theft or extortion. Personally, I encourage people to find well-run charities in their area (or national ones) that focus their work on helping people and then support them to your utmost. That does not mean I want the government forcing me to give an amount they determine in order to meet the unmet needs that they decree exist.

Philosophically, there is nothing wrong with such a belief system and liberals need to stop criticizing it as if those holding to it are evil. A person does not have to agree with the government taking some of her money involuntarily in order to give to somebody else. Wanting to choose how to spend your own money does not make you a bad person. Watch Sally Kohn’s TED talk on emotional correctness before starting the ad hominem attacks on people just because they do not agree with your views on income redistribution.

Imagine if the government was taxing poor and middle class people in order to give the money to the rich. Most of us would be rightly outraged. The difference between people is that some are outraged at the income redistribution in favor of the rich while others are outraged simply at the whole concept of redistribution. For the first 150 years of this country there were legitimate policy debates over whether it was even constitutional for the government to tax some in order to hand the money over to others. This even included some presidential vetoes.

For example, in 1887 Congress sent the Texas Seed Bill to President Grover Cleveland. This bill would have authorized spending $10,000 to buy seed for farmers in a region of Texas suffering from drought. In those days farmers saved some of each year’s crop for use as seed in the next year, but thanks to the drought the Texas farmers in question had no crop, so no seed. President Cleveland vetoed the bill stating that

“I can find no warrant for such an appropriation in the Constitution; and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadily resisted, to the end that the lesson should be constantly enforced that, though the people support the Government, the Government should not support the people.”

I know 1887 was a long time ago, but we have the same Constitution today. If a President of the United States held the position quoted above, perhaps we should not dismiss it so easily as ridiculous. You do not have to agree with that position, but you should admit it is a legitimate one.

In economics we have a concept called Pareto improvement. Policies are Pareto-improving when the policy improves at least one person’s life and makes nobody worse off. Pareto-improving policies are no-brainers, they are win-win, so obviously they should be implemented.

Other beneficial policies are known as Kaldor-improving. A Kaldor-improving policy makes some people better off and others worse off, but in total the community is better off. A government might well decide to implement Kaldor-improving policies, but they are not win-win. Some group is losing and has a legitimate right to oppose such policies.

Income redistribution may or may not be Kaldor-improving (it depends on how efficiently it is done), but it is definitely not Pareto-improving as those whose incomes are taken are made worse off. Thus, there are legitimate grounds for an informed policy debate over whether to partake in such policies, how to best implement them if chosen, and how much income should be redistributed.

This leads nicely into the second reason why many people reasonably oppose our many income redistribution programs: the difficulty of keeping their own fiscal houses in order. While the poor have clearly suffered in the current economy, they are not alone. Yes, the top one percent have done well, but they do not pay all the taxes (only 40%). The rest of the top twenty percent are carrying much of the cost burden for the social safety net programs, yet they are struggling to maintain their own standard of living.

I am sure that when one is in the bottom part of the income distribution it is hard to feel sorry for those who are earning more money, but the reality is that few people want to make large cuts in their own standard of living so that other people can benefit. By this I do not mean that people are not charitable, because Americans are the most charitable people in the world. What I mean is that families have budgets.

Each family’s budget already accounts for taxes and for the level of voluntary, private charitable giving which that family has chosen. When the government asks for more taxes to increase welfare programs, that means the families bearing that cost must cut something which they previously could afford. When that happens at the same time as those families have perhaps already been cutting their budgets thanks to a so-so economy, it is asking a lot for people to go along with a smile on their faces.

Right now, families in the top ten percent of income earners who are self-employed or otherwise do not get health insurance through an employer are facing paying higher taxes for Obamacare and higher health insurance premiums thanks to Obamacare. They will not qualify for subsidies, but may well struggle to afford their own health insurance. As you might imagine, it is tough to ask somebody to pay for others’ insurance before they pay for their own.

The top 25 percent of income earners pay about 90 percent of all taxes in the U.S. That is income and payroll taxes, not just income taxes; all taxes collected. These are the people bearing the cost burden of our welfare and other income redistribution programs. Yet, the bottom of this group is making only around $70,000 per year.

Now that is not poor, but it is not rich either. So when people grumble about all the welfare programs, please remember that a lot of those paying at least part of the bills have to tell their own kids no plenty of times and are not exactly vacationing on the French Riviera every year.

Perhaps it is okay to lack sympathy for the top one percent when their taxes go up, but we should not be so harsh on the rest of the top 25 percent. Yes, life is expensive and I have great sympathy for the poor and what they have to do to stretch their incomes and make ends meet. However, plenty of people in the taxpayer category being asked to fund those welfare programs are having a tough time, too. It is not as tough, but that doesn’t mean they like the idea of making their own lives harder.

Finally, the third reason why people oppose government welfare and income redistribution programs is the inefficiency and poor results of those very programs. Government spends a lot of money and gets very little to show for it.

A top private charity, such as the American Red Cross, spends about 91 cents out of every dollar on its programs. Another way to look at this is that you have to give the Red Cross $1.10 in order for them to give somebody $1.00 worth of assistance. In comparison, estimates are that it costs the federal government at least $1.40 to deliver that same $1.00 in assistance. In my book, that makes the Red Cross a much better deal for everybody involved.

In the last 50 years, our governments (national, state, and local) have spent $15 trillion trying to aid those in poverty and the poverty rate has barely changed. Estimates are that total welfare spending today is around $1 trillion per year. To give you some idea of how much money that is, for what we are spending every two years on antipoverty programs, Habitat for Humanity could build every poor family in the country a house.

People reasonably compare the good works that they see being done by charities to the lack of results that they see from government programs and wonder why the government programs keep getting expanded. Wanting to see the most good done with the money dedicated to helping the poor is not mean-spirited; it is smart, rational, and what everybody should want. So opposing government aid programs does not mean you hate the poor; it might well mean you hate seeing their supposed aid funds wasted.

Take our current health insurance situation as an example. When people see government try to do something perhaps worthwhile yet do it so badly that many people are going to be worse off under Obamacare than before, it is not surprising that people start opposing the expansion of government aid programs. When the economy is struggling for almost everyone, it is not surprising that people resist giving even more than they have been to help others, especially involuntarily. And when people are told that their rights (to their own property) are less important than the rights of others (to use the property of others for their own purposes), it is not surprising that some oppose such policies.

There is no immutable logic in favor of welfare programs and income redistribution. They fall into that gray area of policies that help some and hurt others. These are policies that are debated in democracies and under representative governments like ours. It is up to our representatives to decide the “best” amount and form of such programs, but people on both sides need to understand that these choices are subjective, not objective. Opinions on both sides are valid.

Hopefully, this column will help those on the liberal side to see the conservative argument a little more clearly and in a little more favorable light. I do not expect crowds of liberals to suddenly change their minds on their policy beliefs. I am only asking that they have respect for the arguments of those on the other side and not claim animus as the motivation of those who oppose them. A just society will take care of its poor and needy. But that just society could do that voluntarily, through private charities or at many different levels of support. Government is not the only answer and more aid to the poor is not always better. Those suggesting other paths should not have their views treated as invalid. This area of debate really does need a course in Sally Kohn’s emotional correctness. It would make the world a better place for all of us.